Parliament’s Budget Committee has recommended that Government contains its appetite for domestic borrowing, warning that the continued borrowing from local commercial banks to finance the national budget if not contained will negatively affect the private sector credit.
The appeal was made by Remegio Achia, the Chairperson of the Budget Committee while presenting the report of the Budget Committee on the 2025/26 National Budget Framework Paper during Wednesday’s plenary sitting.
“Total public debt stock stood at US$25.6 billion, equivalent to UGX94.9 trillion, as at 30th June 2024. The Committee recommend that government should gradually scale down on domestic borrowing because it is becoming unsustainable and also negatively effects on private sector credit,” noted Remigio, who is also the Pian County MP.
However, in his Minority report, Ibrahim Ssemujju disagreed with his counterparts on the Budget Committee revealing that the public debt reported by the Committee doesn’t give a full picture of Uganda’s debt situation.
“The Accountant General in a statement attached to the Audit Report, states that Uganda’s Public Debt has increased from Shs97.5 trillion in June 2023 to Shs109.8 trillion by June 2024. Our country has been mortgaged. What should worry you more is that government wants to finance the Shs57 trillion next Financial Year’s budget by borrowing another Shs24 trillion, because it projects to raise Shs33 trillion,” noted Ssemujju.
Ssemujju also lashed out at Government for allocating merely Shs200Bn for the payment of domestic arrears yet the outstanding arrears stand at Shs14Trn.
He explained, “Money government owes ordinary people commonly known as domestic arrears hit Shs14Trn. It increased by 30% from Shs10.8 trillion of the year 2023/24. And guess what, they have allocated a paltry Shs200 billion in the budget to cater for domestic arrears. These arrears include Shs250 billion in gratuity and pension. You have seen old people shade tears on television because of their unpaid pension and gratuity.”
He thus warned Parliament against approving the BFP in its current form noting, “By approving the Budget Framework Paper, you are giving government a green light to borrow. And you should expect Hon. Henry Musasizi to continue trafficking loan requests to Parliament during the course of next Financial Year.”
Ssemujju also accused the Ministry of Finance of forcing the Auditor General to abandon the module he was using to calculate the public debt stating, “The figure of the total public debt is also contested. In calculating public debt, Finance doesn’t include domestic arrears. They have forced the Auditor General to do the same thing. Finance claims, that public debt is Shs94Trn up from Shs86 trillion they declared last Financial Year. One of the tactics Finance is using is to exclude undisbursed loans yet we pay commitment fees them.”
